South Korean tax authorities confiscated roughly ₩260 billion (approx. $183.5 million) worth of cryptocurrency assets since 2021 due to tax arrears, according to a report by a local media outlet on Thursday.
In 2020, the South Korean government introduced a law permitting tax authorities to seize crypto assets for non-payment of taxes. Authorities began seizing the assets last year, the report stated.
South Korea Seizes $180M in Crypto for Non-Payment of Taxes
According to the report, the total amount since last year includes ₩176.3 billion ($124.4 million) seized for non-payment of national tax and ₩83.491 billion ($58.9 million) seized for local tax arrears.
The number of crypto assets seized in Seoul, Incheon, and Gyeonggi Province accounted for about 30% of the total amount seized.
One of the residents in Seoul named Person A was in arrears with local taxes of around ₩1.43 billion ($1.9 million), and authorities seized his crypto exchange account which contains ₩12.49 billion ($8.8 million) of 20 different crypto assets including ₩3.2 billion ($2.2 million) in Bitcoin and ₩1.9 billion ($1.2 million) in Ripple.
After the seizure, Person A paid his tax arrears “sequentially, and in the process, he requested the sale of assets to be withheld.”
It is worth mentioning that the South Korean government permits tax authorities to sell confiscated crypto assets at a current trading price if tax arrears are not paid.
“It is a serious moral hazard to intentionally pay taxes even with hundreds of millions of won in assets. The law and policy guarantee a stable investment environment for virtual currency, but fair taxation principles must be applied to the tax borne by all citizens,” South Korean Rep. Kim Sang-hoon said.
South Korea’s Strict Tax Regulation
Meanwhile, South Korea has always been strict in its tax regulations for a long time. In another report recently, the South Korean government said it would impose a gift tax on cryptocurrency airdrops, with the tax rate ranging from 10 to 50%, depending on its worth.
